What is Probabilistic Simulation?

In many systems, the controlling parameters, processes and events may be uncertain and/or poorly understood. In a deterministic simulation A simulation in which the input parameters are represented using single values (i.e., they are "determined" or assumed to be known with certainty)., these parameters are represented using single values (which typically are described either as "the best guess" or "worst case" values). Probabilistic simulation is the process of explicitly representing this uncertainty by specifying one or more inputs as a probability distribution A mathematical representation of the relative likelihood of a variable having certain specific values. It can be expressed as a PDF (or a PMF for discrete variables), CDF or CCDF. and specifying any random events that could affect the system

If the inputs describing a system are uncertain, the prediction of future performance is necessarily uncertain. That is, the result of any analysis based on inputs represented by probability distributions is itself a probability distribution.

Hence, whereas the result of a deterministic simulation of an uncertain system is a qualified statement ("if we build the dam, the salmon population could go extinct"), the result of a probabilistic simulation of such a system is a quantified probability ("if we build the dam, there is a 20% chance that the salmon population will go extinct"). Such a result is typically much more useful to decision-makers who might utilize the simulation results.

GoldSim has powerful capabilities for carrying out probabilistic simulations. In particular, it uses advanced Monte Carlo simulation A method for propagating (translating) uncertainties in model inputs into uncertainties in model results. techniques to propagate the uncertainty in model inputs to model outputs.

A detailed description of probabilistic simulation concepts, including a discussion of the advantages and disadvantages of probabilistic simulation and a description of Monte Carlo simulation techniques, is provided in Appendix A of the GoldSim User’s Guide.